Police: Gaming board officials knew about DeNaples probe

March 04, 2008

HARRISBURG, Pa. — Pennsylvania Gaming Control Board officials knew about an ongoing state police perjury investigation into a northeastern Pennsylvania businessman before the panel awarded him a casino license, the state’s top police commander told lawmakers Tuesday.

With gaming board officials apparently saying the opposite — that they knew nothing of the investigation into Louis A. DeNaples, and that they never asked the state police to investigate — one senator asked who was being untruthful.

In back-to-back hearings Tuesday, Col. Jeffrey Miller, the Pennsylvania State Police commissioner, told the Senate and House Appropriations Committees that one of his troopers told the gaming board’s top agents that the investigation was ongoing when they asked about it in the weeks before the panel awarded a casino license to DeNaples.

Miller also said he believes that then-board chairman Tad Decker knew about the investigation before the Dec. 20, 2006, vote. Miller, however, suggested that not all seven gaming board members were privy to what agents in the board’s Bureau of Investigation and Enforcement knew.

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“The board should have known because the BIE did know, because they were the ones who referred it to us in the first place,” Miller told senators. He also said the bureau made three other referrals to outside agencies, including state police, on matters relating to DeNaples.

A gaming board spokesman said the agency would have no comment Tuesday.

State police charged DeNaples on Jan. 30 with four counts of perjury and accused him of lying to gaming board agents to win a license for Mount Airy Casino Resort, which DeNaples opened in October. DeNaples is accused of lying about the extent of his relationships with two reputed heads of a Scranton-area organized crime family and two men at the center of a federal investigation into corruption involving Philadelphia City Hall.

DeNaples’ lawyers say he is innocent, and are challenging the charges against him.

Lawmakers have called the situation an embarrassment, although no consensus has emerged over how to change casino licensing to avoid the same thing from happening again.

Miller’s testimony came in response to questions from senators who heard testimony a week ago from top gaming board officials. In statements to the Senate panel and reporters in recent weeks, Decker and current board members have accused the state police of violating an agreement to cooperate with the gaming board’s background investigations of casino applicants.

Last month, the gaming board’s current chairwoman, Mary DiGiacomo Colins, told lawmakers that if the gaming board had known about the state police’s perjury investigation into DeNaples, the agency would have put off a vote on his application.

Decker has insisted that the gaming board had no evidence to find DeNaples unsuitable for casino ownership, and criticized state police for not sharing a transcript of a 2002 FBI telephone wiretap of DeNaples. Miller and other state police officials have said sharing the transcript outside of law enforcement circles would have compromised the perjury investigation and violated federal law.

But, Miller said, Decker appeared to know about the perjury investigation. As proof, he pointed to a Dec. 18, 2006, letter addressed to him by Decker.

In it, Decker wrote, “your office may be in the possession of some important background information” on an undisclosed applicant that could affect the gaming board’s decision, and he implored Miller to share it.

The two agencies also are in a dispute over how state police began the perjury investigation into DeNaples.

Miller and other state police officials insist that gaming board agents believed that DeNaples had lied to them but could not prove it. Thus, the agents asked the state police to request transcripts of the depositions DeNaples gave to them in 2006, which they did, Miller said.

Gaming board officials contend that they asked state police to review DeNaples’ deposition to determine whether the FBI wiretap transcript was relevant to their background investigation of DeNaples.

But, they said state police told them the wiretap transcript was not relevant and also didn’t share their suspicions about DeNaples. The FBI wiretap transcript later helped form the basis for one of the perjury charges against DeNaples.

The conflicting testimony before the Senate panel prompted Sen. Jake Corman, R-Centre, to say that “at the minimum, someone isn’t being honest with this committee.”

In an interview after the hearing, Corman suggested that the matter should be probed further, but said he had not discussed with his fellow senators how to do so.